the situation requires finding a way out in the most urgent order. Not only at the recently concluded second congress of the All-Russian Union of Mine Workers was this same question raised again. And here attention was called to the catastrophic situation with the oil industries.

[2]... Now in the SNK and the Central Committee of the party the question has been posed: is the oil industry really threatened with catastrophic collapse, and within what timeframe might this catastrophe occur? To this question a completely definite answer can be given: there is no catastrophe in the full sense of the word at present, but the situation in the oil-producing regions is such that the oil industry is threatened with inevitable ruin if a series of measures is not adopted immediately to prevent the impending catastrophe.

In fact, in the Baku region at present about 960 wells are in operation instead of 3,500 that were being exploited in normal times, for example in 1913; in the Grozny region only 100 wells are being exploited, as against 350-360 wells that were being exploited in 1913. In the Ural-Emba region only 10-11 wells were being exploited in the summer of last year, the rest were idle. ...The basis of the question lies in the fact that an enormous quantity of idle wells threatens the regions with waterlogging...

[3]... If wells are idle, not only is no oil obtained from them, but an enormous quantity of water remains in them. This water, being heavier compared to oil, displaces the latter from the well formation and enters the oil strata, removing oil from them...

...any drilling for oil in a surveyed region, where the depth of oil and water strata is known, is fraught with considerable risk — a situation is created in which the fulfillment of production assignments for oil extraction becomes difficult to achieve....Consequently, the cessation of exploitation of drilled wells threatens the oil field with flooding by water and with such damage as will be almost equivalent to its complete destruction...Thus, the first basic task of a combat character...is to bring the figure in Baku up to 3,500 wells, in Grozny to 350, and in the Emba to 90...

[4]...If drilling activity is not stepped up in the oil-producing regions, extraction in the very near future will fall to unprecedented levels, and after the accumulated oil reserves are exhausted, which will happen within the next two years, the republic will find itself without liquid fuel, even under conditions of complete control of the oil-producing regions. Such are the consequences threatened by the cessation of drilling activity. As for the unprecedented reduction in extraction activity, this may threaten damage to the oil field so profound that afterward it will be impossible to remedy this damage even with the most intensive drilling and extraction activity. It is rather difficult to say within what timeframe this will occur. In my opinion, this danger has already arrived and must be combated now. In this regard, the example of 1905 has a cautionary significance — the year of the greatest revolutionary upsurge, marked in relation to the Baku region by a series of prolonged strikes, when all work at the oil fields was stopped and a number of oil derricks were burned...

...The restoration of normal work at the oil fields, accompanied by intensified exploitation of wells, did not, however, lead to a rise in extraction to the levels of the 1901-1904 period.

[5] This is explained by the fact that many wells, idle in 1905, perished forever. The cessation of pumping in them disrupted the normal regime, maintained by absolutely definite pumping of water and oil, and instead of oil the wells began to yield only water.

At present the number of idle wells in Baku numbers over 4,000. In this enormous number of idle wells lies the fundamental danger to all the regions, and this danger has already arrived, and if we do not begin to combat it now, it may turn into catastrophe. The fundamental task of this struggle must consist in the gradual increase in the number of exploited wells and in reducing idle wells to the possible minimum. Is this struggle possible under present objective conditions with the means and forces of Soviet power, or is it the case that without foreign assistance we cannot manage and will have to go begging to concessionaires, to American, English, or some other capitalist power...

[6]...Forget for a time about the existence of certain decrees that constrain the initiative of economic organs, and you will see that it is possible to save the oil industry from final ruin by our own forces and means. And then why do we need a concessionaire? In general, a concessionaire is needed when the state either cannot manage with its own means in the creation of one enterprise or another, or when given more important tasks it simply does not have the means to reach a particular matter, and it counts on developing certain branches of industry with the help of the concessionaire and deriving profit from it.

What can a concessionaire give us if we hand over to him for exploitation the oil-producing areas of the Baku and Grozny regions?

First of all, it is supposed that he will bring with him the necessary technical personnel, then supply from abroad all necessary technical equipment and materials: pipes, machines, ropes, belts, electric light bulbs, and so forth and so on, and then conduct the business in such a way that everything will proceed smoothly and successfully for him.

As a result for him — profit, for us...